A new bill has been introduced in Congress to expand the Child Tax Credit (CTC) in order to provide more economic assistance to low-income families. Currently, families have the opportunity to claim a credit of $2,000, with a maximum refundable amount of $1,600 per child. However, that would increase if the Senate approves the measure.
The bipartisan bill received approval in the House of Representatives at the end of January, leaving only the Senate’s approval pending for the increase in the CTC to become official. If the proposal is accepted, families may be eligible to receive a higher sum of money in the coming three years.
According to the proposal, there would be a gradual increase in the maximum reimbursable amount per child, starting in 2023 and continuing through 2024 and 2025, until it reaches $2,000.
Under this plan, the refundable amount per child for fiscal year 2023 would stay at $1,800. By 2024, the amount would see an increase to $1,900, and in 2025, it would reach the maximum limit of $2,000. In the years 2024 and 2025, the figure would be modified based on inflation indices.
At present, individuals can determine the CTC by multiplying their earned income (which should exceed $2,500) by 15%. Under the new legislation, any earned income exceeding $2,500 will be subject to a 15% multiplication.
Afterward, the outcome will be multiplied by the number of eligible children. Experts in the field have determined that the Washington Post’s calculator is highly accurate.
Key Criteria for Extended Child Tax Credit Mirror Current Requirements
The requirements for the expanded version of the Child Tax Credit would closely resemble the current ones.
The dependent should have been below 17 years old by December 31, 2023.
A valid Social Security number is required for the dependent.
The individual in question must be a US citizen or resident alien.
The dependent should not have provided more than half of their own support.
The individual in question must have resided with the taxpayer for a period exceeding six months.
